First Western Financial Inc (MYFW) Q4 2024 Earnings Call Highlights: Record Loan Production and Strong Deposit Growth

First Western Financial Inc (MYFW) reported its fourth quarter 2024 earnings, highlighting record loan production and strong deposit growth. The company's net income available to common shareholders increased to $2.7 million, with diluted earnings per share of $0.28. Net interest income rose to $16.9 million, driven by an increase in average interest-earning assets and an expansion in the net interest margin to 2.45%. Total loans and average deposits both showed growth, with loans increasing by 2.1% and deposits by 4.0%.



First Western's record loan production in Q4 2024 was driven by several factors:

1. Diversified loan portfolio: The company's loan production was well-diversified, indicating a balanced approach to lending across various sectors and industries.
2. Strong demand: The increase in loan demand can be attributed to the overall economic recovery and improved consumer confidence, as well as the company's targeted marketing and business development efforts.
3. Expansion in net interest margin: First Western's net interest margin increased by 13 basis points to 2.45% in Q4 2024 compared to Q3 2024. This expansion allowed the company to offer more competitive loan rates, attracting new borrowers and driving loan growth.
4. Disciplined expense control: The company maintained strong expense control, which helped to improve profitability and support loan growth.

First Western's strong deposit growth in Q4 2024 was achieved through several strategies:

1. Disciplined expense control: The company maintained a focus on controlling expenses, which helped to improve profitability and attract new deposit relationships.
2. Adding new deposit relationships: First Western continued to add new deposit relationships, contributing to the 18% annualized growth in total deposits during the quarter.
3. Focusing on core deposit gathering: The company prioritized the gathering of core deposits, which are more stable and less likely to be withdrawn during economic downturns.
4. Expanding net interest margin: First Western expanded its net interest margin by 13 basis points in Q4 2024, which contributed to the growth in net interest income.
5. Investing in technology, banking talent, and office expansion: First Western has made investments in technology, banking talent, and office expansion, which have helped to improve its efficiency and attract new customers.

First Western's net interest margin expansion in Q4 2024 positively impacted its overall profitability. The company's net interest margin increased by 13 basis points from 2.32% in Q3 2024 to 2.45% in Q4 2024. This expansion was driven by both an increase in average interest-earning assets and an expansion in the net interest margin itself. As a result, net interest income rose to $16.9 million in Q4 2024, up from $15.6 million in Q3 2024.

Looking ahead to 2025, First Western is well-positioned to continue margin expansion due to several factors:

1. Balance sheet strength: The company's strong balance sheet provides a solid foundation for managing through economic downturns and taking advantage of strengthening economic conditions.
2. Banking talent: The addition of banking talent in recent quarters has enhanced the company's ability to execute on strategic priorities and deliver improved financial performance.
3. Deposit gathering: First Western's focus on core deposit gathering should result in a modest level of asset growth until economic conditions improve, further supporting margin expansion.
4. Liability-sensitive balance sheet: As interest rates decline, the company's liability-sensitive balance sheet should lead to further net interest margin expansion.

In conclusion, First Western Financial Inc (MYFW) reported strong financial results in Q4 2024, driven by record loan production and robust deposit growth. The company's disciplined expense control, diversified loan portfolio, and expansion in net interest margin contributed to its overall profitability. With a strong balance sheet, banking talent, and focus on core deposit gathering, First Western is well-positioned to continue margin expansion in 2025.